Non-interest expense totaling
$73.9 million for the three months ended September 30, 2009 remained relatively unchanged from the same period one year ago. However, the FDIC insurance assessment increased $2.9 million to $3.3 million for the third quarter of 2009 as compared
to $412 thousand for the third quarter of 2008 due to the depletion of our prior period FDIC acquisition credit, higher normal assessment rates and our election to participate in the FDICs Temporary Liquidity Guarantee Program since the prior
year period. Other non-interest expense decreased $2.0 million to $11.1 million for the three months ended September 30, 2009 as compared to the same period of 2008 due to a $1.2 million prepayment penalty on $25.0 million in Federal Home Loan
Bank advances during the third quarter of 2008 and lower other real estate owned expense during the 2009 period. Salary and employee benefits also decreased a combined $1.0 million as compared to the third quarter of 2008 primarily due to staffing
efficiencies fully realized during 2009 relating to staff acquired in the acquisition of Greater Community Bancorp on July 1, 2008.

Third quarter of 2009 compared with second quarter of 2009

Non-interest expense decreased by $4.2 million, or 5.4 percent to
$73.9 million for the third quarter of 2009 from $78.1 million for the linked quarter ended June 30, 2009. The FDICs insurance assessment decreased $6.9 million from the linked quarter mainly due to a special assessment totaling $6.5
million imposed during the second quarter of 2009. Salary and employee benefits increased a combined $1.2 million mainly due to additional staffing caused, in part, by five de novo branches opened since the middle of the second quarter of 2009.
Amortization of other intangible assets increased $699 thousand mainly due to a $681 thousand net valuation allowance recovery on the fair value of previously impaired loan servicing rights during the second quarter of 2009.

Non-interest expense increased approximately $14.1 million to $78.1 million for
the quarter ended June 30, 2009 from $64.0 million for the quarter ended June 30, 2008 mainly due to a $10.0 million increase in the FDIC insurance assessment. The majority of the increased assessment consists of a five basis point special
assessment (imposed on all insured depository institutions based on assets minus Tier 1 capital as of June 30, 2009) which totaled $6.5 million for Valley. The FDIC insurance assessment also increased due to the depletion of our prior period
FDIC acquisition credit, higher normal assessment rates and our election to participate in the FDICs Temporary Liquidity Guarantee Program. Salary and employee benefits increased a combined $2.3 million and net occupancy and equipment expense
increased $1.6 million as compared to the second quarter of 2008 primarily due to Valleys acquisition of Greater Community Bancorp and its 16 full-service branches on July 1, 2008, as well as additional staffing at 5 de novo branches
opened since June 30, 2008. Management maintains a strong focus on controlling operating expenses as our branch network expands through strategic growth opportunities in our primary markets.

Second quarter of 2009 compared with first quarter of 2009

Non-interest expense increased by $1.2 million, or 1.5 percent to $78.1 million for the second quarter of 2009 from $76.9 million for the linked quarter ended March 31, 2009. The FDICs insurance assessment increased $7.1 million
from the linked quarter mainly due to a special assessment totaling $6.5 million imposed during the second quarter of 2009. Salary and employee benefits decreased a combined $2.4 million mainly due to staffing efficiencies realized in the second
quarter of 2009, as well as lower payroll taxes caused by maximums reached on certain annual tax limits. Amortization of other intangible assets decreased $1.8 million due to a $681 thousand net valuation allowance recovery on the fair value of
previously impaired loan servicing rights during the second quarter of 2009 as compared to a $1.1 million impairment charge incurred on loan servicing rights in the first quarter of 2009. Net occupancy and equipment expense decreased $1.2 million
mainly as a result of normal seasonal declines in utilities and other maintenance expenses.

The following
table presents the components of non-interest expense for the three months ended March 31, 2009 and 2008:

Three Months EndedMarch 31,

2009

2008

(in thousands)

Salary expense

$

32,447

$

30,163

Employee benefit expense

9,270

8,955

Net occupancy and equipment expense

15,551

13,481

Amortization of other intangible assets

2,816

1,746

Professional and legal fees

2,092

2,289

Advertising

845

376

Other

13,925

10,468

Total non-interest expense

$

76,946

$

67,478

Non-interest expense increased approximately $9.4 million, or 14.0 percent to $76.9 million for the quarter ended
March 31, 2009 from $67.5 million for the quarter ended March 31, 2008 partially due to Valleys acquisition of Greater Community and its 16 full-service branches on July 1, 2008, as well as 7 de novo branches opened since
March 31, 2008.

The efficiency ratio measures total non-interest expense as a percentage of net interest income plus total non-interest
income. Our efficiency ratio was 54.75 percent and 58.77 percent for the three months ended March 31, 2009 and 2008, respectively. The decrease is due to an increase in net interest income mainly caused by a decline in the cost of average
interest bearing deposits, and an increase in non-interest income, partially offset by higher non-interest expense. We strive to maintain a low efficiency ratio through diligent management of its operating expenses and balance sheet. However, our
current and past de novo branch expansion efforts may continue to negatively impact the ratio until these new branches become profitable operations.

Salary and employee benefit expense increased a combined $2.6 million, or 6.6 percent for the three months ended March 31, 2009 compared with the same period in 2008. The increase is mainly due to additional operating expenses related
to the acquired Greater Community branches and the de novo branches opened during the last twelve months, including increases in payroll taxes, health care insurance and pension costs.

Net occupancy and equipment expense increased $2.1 million, or 15.4 percent for the three months ended March 31, 2009 compared with the same period in 2008. The increase is largely due to the addition of 16
full-service branches from the acquisition of Greater Community, as well as 7 de novo branches since March 31, 2008.

Amortization of other intangible
assets consists of amortization expense recognized on loan servicing rights, core deposits, and other intangibles, as well as periodic impairment charges on such asset increased $1.1 million to $2.8 million for the three months ended March 31,
2009. For the three months ended March 31, 2009 and 2008, Valley recognized impairment charges totaling $1.1 million and $217 thousand, respectively, on loan servicing rights due to the book value of certain stratums of the loan servicing
rights portfolio exceeding their estimated fair value at the end of each period.

Other non-interest expense increased $3.5 million or 33.0 percent to
$13.9 million for the quarter ended March 31, 2009 mainly due to a $2.9 million increase in FDIC insurance premiums caused by the depletion of our prior period FDIC acquisition credit, higher assessment rates and our election to participate in
the FDICs Temporary Liquidity Guaranteed program. The remaining increase in other non-interest expense was primarily due to general increases caused by Valleys de novo branching efforts since the 2008 period and the acquisition of
Greater Community.

Non-interest expense increased approximately $9.4 million
to $76.9 million for the quarter ended March 31, 2009 from $67.5 million for the quarter ended March 31, 2008. Other non-interest expense increased by $3.5 million mainly due to a $2.9 million increase in Federal Deposit Insurance
Corporation (FDIC) insurance premiums caused by depletion of our prior acquisition credit, higher assessment rates and our election to participate in the FDICs Temporary Liquidity Guarantee Program. Amortization of other intangible
assets increased $1.1 million due to a $1.1 million impairment charge recognized on the fair value of loan servicing rights during the first quarter of 2009. Salary and employee benefits increased a combined $2.6 million and net occupancy and
equipment expense increased $2.1 million as compared to the first quarter of 2008 primarily due to Valleys acquisition of Greater Community Bancorp and its 16 full-service branches on July 1, 2008, as well as additional staffing needed at
7 de novo branches opened since March 31, 2008.

First quarter of 2009 compared with fourth quarter of 2008

Non-interest expense decreased by $3.0 million, or 3.8 percent to $76.9 million for the first quarter of 2009 from $79.9 million for the linked quarter ended
December 31, 2008. Other non-interest expense decreased $6.7 million mainly due to a $4.6 million loss recorded in the fourth quarter of 2008 on the discovery of a check fraud scheme perpetrated by a long-time commercial customer and a $3.1
million expense accelerated in the 2008 period on the termination of a hedging relationship, partially offset by higher FDIC insurance premiums in the first quarter of 2009. Salary and employee benefits increased a combined $1.5 million primarily
due to higher payroll taxes during the 2009 period as annual tax limits on employee income reduced such expenses in the fourth quarter of 2008. Additionally, net occupancy and equipment expense increased $1.8 million from the linked quarter due to
normal seasonal related increases in utilities and other maintenance expenses, as well as two de novo branches opened during the first quarter of 2009.

Non-interest expense increased approximately $16.6
million to $80.0 million for the quarter ended December 31, 2008 from $63.3 million for the quarter ended December 31, 2007. Other non-interest expense increased by $10.3 million partially due to a $4.6 million loss recorded on discovery
of a check fraud scheme perpetrated by a long-time commercial customer of Valley National Bank. Additionally, other non-interest expense includes a $3.1 million expense which was accelerated from future periods to the current quarter due to a
hedging relationship terminated in November 2008 for two interest rate caps based on the effective federal funds rate. Salary and employee benefits increased a combined $4.5 million and net occupancy and equipment expense increased $1.2 million
primarily due to the acquisition of Greater Community during the third quarter of 2008. Professional and legal fees increased $2.2 million mainly due to a $1.7 million reduction in litigation contingencies in the fourth quarter of 2007. Partially
offsetting these increases, there were no goodwill impairment charges in the fourth quarter of 2008 compared to a $2.3 million ($1.5 million after taxes) impairment recognized in the fourth quarter of 2007 due to Valleys decision to sell its
former wholly owned broker-dealer subsidiary.

Fourth quarter of 2008 compared with third quarter of 2008

Non-interest expense increased by $6.1 million, or 8.3 percent from $73.8 million for the quarter ended September 30, 2008 primarily due to a $7.1 million increase
in other non-interest expense. Other non-interest expense increased due to a $4.6 million loss recorded on discovery of a check fraud scheme perpetrated by a long-time commercial customer in December 2008 and a $3.1 million expense incurred on the
termination of a hedging relationship in November 2008. Partially offsetting the increase, salary and employee benefits declined a combined $1.3 million mainly due to higher accruals for payroll taxes, healthcare insurance and stock incentive,
pension and 401K plans during third quarter of 2008.

The following table presents the components of non-interest expense for each of the three and nine months ended September 30, 2008 and 2007:

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2008

2007

2008

2007

(in thousands)

Salary expense

$

33,147

$

29,459

$

93,448

$

87,139

Employee benefit expense

8,363

7,342

24,215

22,781

Net occupancy and equipment expense

14,032

12,285

40,288

36,999

Amortization of other intangible assets

1,959

1,881

5,107

5,671

Professional and legal fees

1,852

2,003

6,038

5,070

Advertising

965

665

1,682

2,407

Other

13,524

10,538

34,501

30,510

Total non-interest expense

$

73,842

$

64,173

$

205,279

$

190,577

Non-interest expense increased by $9.7 million, or 15.1 percent for the three months ended September 30, 2008
compared with the same period in 2007, and increased $14.7 million, or 7.7 percent for the nine months ended September 30, 2008 compared with the same period in 2007. The increases are primarily due the Greater Community acquisition on
July 1, 2008 and the addition of nine de novo branches to our branch network over the last twelve month period.

The efficiency ratio measures a
banks total non-interest expense as a percentage of net interest income plus total non-interest income. Our efficiency ratio was 88.8 percent and 64.5 percent for the three and nine months ended September 30, 2008, respectively, compared
with 55.9 percent and 51.7 percent for the same periods in 2007. The increase in the efficiency ratio for the three and nine months ended September 30, 2008 is primarily due to other-than-temporary impairment charges and realized losses on
Fannie Mae and Freddie Mac perpetual preferred stock totaling $70.9 million incurred in the third quarter of 2008 which greatly reduced our non-interest income. We strive to maintain a low efficiency ratio through diligent management of our
operating expenses and balance sheet. However, even exclusive of other-than-temporary impairment charges on securities and other one-time charges, our current and past de novo branch expansion efforts may continue to negatively impact the ratio
until these new branches become profitable operations.

Salary and employee benefit expense increased a combined $4.7 million for the three months ended
September 30, 2008 compared with the same period in 2007, and increased $7.7 million, or 7.0 percent for the nine months ended September 30, 2008 compared with the same period in 2007. Both increases are mainly due to our organizational
expansion through the acquisition of Greater Community and the addition of nine de novo branches to our branch network over the last twelve month period.

Net occupancy expense increased $1.7 million or 14.2 percent for the three months ended September 30, 2008 compared with the same period in 2007 and increased $3.3 million, or 8.9 percent for the nine months ended September 30,
2008 compared with the same period in 2007. Both increases are mainly due to our branch network expansion during the last twelve month period.

Professional and legal fees increased $968 thousand, or 19.1 percent for the nine months ended September 30, 2008 compared with the same period in 2007, primarily due to general increases in advisory fees caused by our organizational
growth.

Advertising expense decreased $725 thousand, or 30.1 percent for the nine months ended September 30, 2008 compared with the same period of
2007 mainly due to fewer Valley branding promotions during the 2008 period.

Other non-interest expense increased $3.0 million, or 28.3 percent for the three months ended September 30, 2008
compared with the same period in 2007, and increased $4.0 million, or 13.1 percent for the nine months ended September 30, 2008 compared with the same period in 2007. The increases were primarily due to a $1.2 million prepayment penalty on
$25.0 million in Federal Home Loan Bank advances during the third quarter of 2008, and increases in other real estate owned expense of $886 thousand and $1.0 million, respectively, for the three and nine months ended September 30, 2008. The
remaining increase in other non-interest expense for the three and nine months period was primarily due to several general increases caused by the Greater Community acquisition.

Non-interest expense increased by $9.7 million, or 15.1 percent to $73.8 million
for the quarter ended September 30, 2008 from $64.1 million for the quarter ended September 30, 2007 primarily due to the Greater Community acquisition on July 1, 2008 and the addition of nine de novo branches to Valleys branch
network over the last twelve-month period. Valleys organizational expansion since the third quarter of 2007 accounted for a combined $4.7 million increase in salary and employee benefits and a $1.7 million increase in net occupancy and
equipment expense during the third quarter of 2008. Other non-interest expense increased $3.0 million or 28.3 percent to $13.5 million for the quarter ended September 30, 2008 mainly due to a $1.2 million prepayment penalty on certain long-term
Federal Home Loan Bank advances assumed in the Greater Community acquisition and an $886 thousand increase in expenses related to other real estate owned. The remaining increase in other non-interest

6

Valley National Bancorp (NYSE: VLY)

2008 Third Quarter Earnings

October 23, 2008

expense was primarily due to several general increases caused by the Greater Community acquisition and Valleys de novo branching efforts since the 2007
period.

Third quarter of 2008 compared with second quarter of 2008

Non-interest expense increased $9.8 million, or 15.5 percent to $73.8 million for the third quarter of 2008 from $64.0 million for the linked quarter ended June 30, 2008. Salary and employee benefits increased a
combined $4.5 million and net occupancy and equipment expense increased $1.3 million mainly due to the acquisition of Greater Community during the third quarter of 2008. Other non-interest expense increased $3.0 million for the quarter ended
September 30, 2008 mainly due to a $1.2 million prepayment penalty on Federal Home Loan Bank advances and an $829 thousand increase in other real estate owned expense. The remaining increase in other non-interest expense was primarily due to
several general increases caused by the Greater Community acquisition.

The following table presents the components of non-interest expense for each of the three and six months ended June 30, 2008 and 2007:

Three Months EndedJune 30,

Six Months EndedJune 30,

2008

2007

2008

2007

(in thousands)

Salary expense

$

30,138

$

29,152

$

60,301

$

57,680

Employee benefit expense

6,897

7,478

15,852

15,439

Net occupancy and equipment expense

12,775

12,698

26,256

24,714

Amortization of other intangible assets

1,402

1,866

3,148

3,790

Professional and legal fees

1,897

1,412

4,186

3,067

Advertising

341

806

717

1,742

Other

10,509

10,179

20,977

19,972

Total non-interest expense

$

63,959

$

63,591

$

131,437

$

126,404

Non-interest expense increased by $368 thousand, or 0.6 percent for the three months ended June 30, 2008
compared with the same period in 2007, and increased $5.0 million, or 4.0 percent for the six months ended June 30, 2008 compared with the same period in 2007. The increases are partially due to the addition of ten de novo branches over the
last twelve month period, including eight in the first half of 2008. The de novo branch openings expanded Valleys branch network by almost six percent as compared to June 30, 2007.

The efficiency ratio measures a banks total non-interest expense as a percentage of net interest income plus total non-interest income. Valleys efficiency
ratio was 53.1 percent and 55.8 percent for the three and six months ended June 30, 2008, respectively, compared with 53.8 percent and 49.8 percent for the same periods in 2007. For the six month period, the increase in the efficiency ratio is
primarily due to lower non-interest income in 2008 compared to 2007 mainly attributable to a gain of $16.4 million recognized on the sale of a Manhattan office building in the first quarter of 2007 and a $7.4 million decrease in net trading gains,
and an increase in non-interest expense, partially offset by an increase in net interest income. Valley strives to maintain a low efficiency ratio through diligent management of its operating expenses and balance sheet. However, Valleys
current and past de novo branch expansion efforts may continue to negatively impact the ratio until these new branches become profitable operations.

Salary and employee benefit expense remained relatively flat for the three months ended June 30, 2008 compared with the same period in 2007, and increased $3.0 million, or 4.1 percent for the six months ended June 30, 2008
compared with the same period in 2007. The increase in the year-to-date period is mainly due to additional expenses incurred to support the de novo branches opened during the last twelve months, as well as higher stock-based incentive compensation.
Stock-based incentive compensation increased $627 thousand due to higher stock award expense immediately recognized for awards granted to several retirement eligible employees during the first quarter of 2008 as compared to the 2007 period.

Net occupancy expense remained relatively flat for the three months ended June 30, 2008 compared with the same period in 2007 and increased $1.5
million, or 6.2 percent for the six months ended June 30, 2008 compared with the same period in 2007. The increase in the year-to-date period is due to higher overall facility expenses caused by the addition of de novo branches since
June 30, 2007.

Professional and legal fees increased $485 thousand, or 34.3 percent for the three months ended June 30, 2008 compared with the
same period in 2007, and increased $1.1 million, or 36.5 percent for the six months ended June 30, 2008 compared with the same period in 2007. Both increases were partly due to general increases in advisory fees caused by organizational growth.

Advertising expense decreased $1.0 million, or 58.8 percent for the six months ended June 30, 2008 compared with the
same period of 2007 mainly due to fewer Valley branding promotions during the 2008 period.

Other non-interest expense remained relatively flat for the
three months ended June 30, 2008 compared with the same period in 2007, and increased $1.0 million, or 5.0 percent for the six months ended June 30, 2008 compared with the same period in 2007. The increase was primarily due to increases in
general expenses caused by Valleys de novo branching efforts during the last twelve months. Significant components of other non-interest expense include data processing, telephone, service fees, debit card fees, postage, stationery, insurance,
and title search fees.

Non-interest expense increased by $368 thousand to $64.0 million for the quarter ended June 30, 2008 from $63.6 million for the quarter ended June 30, 2007. Professional and legal fees increased $485 thousand and salary and
employee benefits expense increased by a combined $405 thousand as compared to the second quarter of 2007 mainly due to organizational growth through the expansion of Valleys branch network. Advertising expense declined $465 thousand as
compared to the 2007 period due to a reduction in Valley branding promotions in 2008.

Second quarter of 2008 compared with first quarter of 2008

Non-interest expense decreased $3.5 million, or 5.2 percent to $64.0 million for the second quarter of 2008 from $67.5 million for the linked quarter ended
March 31, 2008. Salary and employee benefits decreased $2.1 million mainly due to a $1.0 million decrease in stock award expense during the second quarter of 2008 mostly related to immediate expense recognized for awards granted to several
retirement eligible employees during the first quarter of 2008, as well as a decline in payroll taxes. Net occupancy and equipment expense also decreased $706 thousand from the linked quarter as Valley experienced normal seasonal declines in
utilities and other maintenance expenses.

The following table presents the components of non-interest expense for the three months ended
March 31, 2008 and 2007:

Three Months EndedMarch 31,

2008

2007

(in thousands)

Salary expense

$

30,163

$

28,528

Employee benefit expense

8,955

7,961

Net occupancy and equipment expense

13,481

12,016

Amortization of other intangible assets

1,746

1,924

Professional and legal fees

2,289

1,655

Advertising

376

936

Other

13,255

11,195

Total non-interest expense

$

70,265

$

64,215

Non-interest expense increased by $6.1 million, or 9.4 percent to approximately $70.3 million for the quarter
ended March 31, 2008 from $64.2 million for the quarter ended March 31, 2007 partially due to the addition of nine de novo branches over the last twelve month period. The de novo branch openings expanded Valleys branch network by
over five percent as compared to the first quarter of 2007.

The efficiency ratio measures a banks total non-interest expense as a percentage of net interest income plus total
non-interest income. Valleys efficiency ratio was 59.75 percent and 46.79 percent for the three months ended March 31, 2008 and 2007, respectively. The increase is due to a decrease in non-interest income during the period mainly
attributable to a gain of $16.4 million recognized on the sale of a Manhattan office building in the first quarter of 2007, an increase in non-interest expense as well as a decline in net interest income. Valley strives to maintain a low efficiency
ratio through diligent management of its operating expenses and balance sheet. However, Valleys current and past de novo branch expansion efforts may continue to negatively impact the ratio until these new branches become profitable
operations.

Salary and employee benefit expense increased $2.6 million, or 7.2 percent for the three months ended March 31, 2008 compared with the
same period in 2007. The increase is mainly due to additional expenses incurred to support the expanded branch operations resulting from the de novo branches opened during the last twelve months, as well as higher stock-based incentive compensation,
health care insurance and pension costs. Stock-based incentive compensation increased partly due to a $649 thousand increase in stock award expense immediately recognized for awards granted to several retirement eligible employees during the 2008
period.

Net occupancy expense increased $1.5 million, or 12.2 percent for the three months ended March 31, 2008 compared with the same period in
2007. The increase is largely due to the addition of nine de novo branches since March 31, 2007, including five new offices opened in the first quarter of 2008.

Other non-interest expense increased $2.1 million or 18.4 percent to $13.3 million for the quarter ended March 31, 2008 mainly due to a $2.8 million mark-to-market loss adjustment on Valleys junior
subordinated debentures issued to capital trust and a Federal Home Loan Bank advance reported at fair value compared to a $1.4 million mark-to-market loss adjustment for the quarter ended March 31, 2007. The remaining increase in other
non-interest expense was primarily due to general increases caused by Valleys de novo branching efforts since the 2007 period.

Non-interest expense increased by $6.1 million, or 9.4 percent to $70.3 million
for the quarter ended March 31, 2008 from $64.2 million for the quarter ended March 31, 2007 primarily due to the addition of nine de novo branches over the last twelve-month period. The de novo branch openings expanded Valleys
branch network by over five percent as compared to the first quarter of 2007 and contributed to a $2.6 million increase in salary and employee benefits and a $1.5 million increase in net occupancy and equipment expense. Salary and employee benefits
included a $649 thousand increase in stock award expense primarily related to stock awards granted to several retirement eligible employees which are required to be immediately expensed on the grant date. Other non-interest expense increased $2.1
million or 18.4 percent to $13.3 million for the quarter ended March 31, 2008 mainly due to a $2.8 million mark-to-market loss adjustment on Valleys junior subordinated debentures issued to capital trust (commonly known as trust
preferred securities) and Federal Home Loan Bank advances reported at fair value as compared to a $1.4 million mark-to-market loss adjustment for the quarter ended March 31, 2007. The remaining increase in other non-interest expense was
primarily due to general increases caused by Valleys de novo branching efforts since the 2007 period.

5

Valley National Bancorp (NYSE: VLY)

2008 First Quarter Earnings

April 24, 2008

First quarter of 2008 compared with fourth quarter of 2007

Non-interest expense increased $8.4 million, or 13.6 percent to $70.3 million for the first quarter of 2008 from $61.9 million for the linked quarter ended
December 31, 2007. Other non-interest expense increased $4.4 million to $13.3 million for the quarter ended March 31, 2008 mainly due to a $2.8 million mark-to-market loss adjustment on trust preferred securities and Federal Home Loan Bank
advances reported at fair value as compared to a $1.5 million mark-to-market gain adjustment for the quarter ended December 31, 2007. Salary and employee benefits increased $3.4 million due to higher payroll taxes during the current period as
annual tax limits on employee income reduced such expenses in the fourth quarter of 2007, as well as, a $935 thousand increase in stock award expense during the 2008 period mostly related to stock awards granted to retirement eligible employees.
Professional and legal fees increased $2.2 million mainly due to a $1.7 million reduction in contingencies during the fourth quarter of 2007. Net occupancy and equipment expense increased $910 thousand from the linked quarter as Valley opened five
additional de novo branches during the 2008 period and experienced normal seasonally increases in utilities and other maintenance expenses. Partially offsetting these increases, non-interest expense declined $2.3 million due to a goodwill impairment
charge relating to Valleys decision to sell its wholly owned broker-dealer subsidiary during the fourth quarter of 2007. The sale transaction was completed on March 31, 2008 and the transaction resulted in an immaterial loss for the first
quarter of 2008.

Non-interest expense decreased approximately $182 thousand to $61.9 million for
the quarter ended December 31, 2007 from $62.0 million for the quarter ended December 31, 2006. Professional and legal fees decreased $1.8 million from the linked quarter mainly due to a $1.7 million reduction in contingencies. Advertising
expense declined $1.3 million from the fourth quarter of 2006 as Valley decreased name branding promotions in the fourth quarter of 2007. Other non-interest expense declined $1.2 million from the third quarter of 2007 mainly due to an offset of $1.5
million in net unrealized gains on trust preferred securities and Federal Home Loan Bank advances held at fair value during the fourth quarter of 2007. Offsetting these decreases, Valley recognized a $2.3 million ($1.5 million after-taxes)
goodwill impairment charge due to its decision to sell its wholly owned broker-dealer subsidiary. Net occupancy and equipment expense also increased $1.2 million from the same quarter one year ago mainly due to the addition of six de novo branches
to Valleys branch network over the last twelve month period.

Fourth quarter of 2007 compared with third quarter of 2007

Non-interest expense decreased $2.3 million, or 3.7 percent to $61.9 million for the fourth quarter of 2007 from $64.2 million for the linked quarter ended
September 30, 2007. Professional and legal fees decreased $2.0 million from the linked quarter mainly due to a $1.7 million reduction in contingencies. Other non-interest expense declined $1.7 million from the third quarter of 2007 mainly due
to $1.5 million in net unrealized gains on trust preferred securities and Federal Home Loan Bank advances held at fair value during the fourth quarter of 2007 as compared to a net loss of $57 thousand on the same financial liabilities in the third
quarter of 2007. Salary and employee benefits also declined $1.1 million in the fourth quarter when compared to the third quarter of 2007 due to higher accruals for health care insurance, payroll taxes and pension costs during the third quarter.
Offsetting the decreases, Valley recognized a $2.3 million ($1.5 million after-taxes) goodwill impairment charge due to its decision to sell Glen Rauch Securities, Inc.

The following table presents the components of non-interest expense for each of the three and nine months ended September 30, 2007 and 2006:

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2007

2006

2007

2006

(in thousands)

Salary Expense

$

29,459

$

28,109

$

87,139

$

81,678

Employee benefit expense

7,342

7,915

22,781

21,800

Net occupancy and equipment expense

12,285

12,010

36,999

34,743

Amortization of other intangible assets

1,881

2,165

5,671

6,536

Professional and legal fees

2,003

3,085

5,070

7,083

Advertising

665

2,402

2,407

6,651

Other

10,596

9,940

29,246

29,816

Total non-interest expense

$

64,231

$

65,626

$

189,313

$

188,307

Non-interest expense decreased by $1.4 million, or 2.1 percent for the three months ended September 30, 2007
compared with the same period in 2006, and increased $1.0 million, or 0.5 percent for the nine months ended September 30, 2007 compared with the same period in 2006. The increase incurred during the nine month period is partially due to the
addition of eight de novo branches over the last twelve month period.

The efficiency ratio measures a banks total non-interest expense as a
percentage of net interest income plus total non-interest income. Valleys efficiency ratio was 55.96 percent and 51.52 percent for the three and nine months ended September 30, 2007, respectively, compared with 59.09 percent and 54.31
percent for the same periods in 2006. For the three and nine month periods, the efficiency ratio declined primarily due to growth in non-interest income during the period (see discussion of non-interest income variances above), partially offset by a
decline in net interest income. Valley strives to maintain a low efficiency ratio through diligent management of its operating expenses and balance sheet. However, Valleys current and past de novo branch expansion efforts may continue to
negatively impact the ratio until these new branches become profitable operations.

Salary and employee benefit expense increased $777 thousand, or 2.2
percent for the three months ended September 30, 2007 compared with the same period in 2006, and increased $6.4 million, or 6.2 percent for the nine months ended September 30, 2007 compared with the same period in 2006. The increases were
mainly due to additional expenses incurred to support the expanded branch operations resulting from the de novo branches opened during the last twelve months, as well as higher pension costs.

Net occupancy expense increased $2.3 million, or 6.5 percent for the nine months ended September 30, 2007 compared with the same period in 2006. The increase was
largely due to higher rent and depreciation expense caused by the addition of eight de novo branches since September 30, 2006, including five new offices opened in the first nine months of 2007.

Professional and legal fees decreased $1.1 million, or 35.1 percent for the three months ended September 30, 2007 compared with the same period in 2006, and
decreased $2.0 million, or 28.4 percent for the nine months ended September 30, 2007 compared with the same period in 2006. Both declines were primarily due to fees related to tax planning recognized during the third quarter of 2006 and general
decreases in professional services during the 2007 periods.

Advertising expense decreased $1.7 million, or 72.3 percent for the third quarter of 2007
compared with the third quarter of 2006, and decreased $4.2 million, or 63.8 percent for the nine months ended September 30, 2007 compared with the same period in 2006. The decreases in advertising were mainly due to less Valley branding
promotions run during the 2007 periods.

Other non-interest expense increased $656 thousand, or 6.6 percent for the three months ended September 30, 2007
compared with the same period in 2006, and decreased $570 thousand, or 1.9 percent for the nine months ended September 30, 2007 compared with the same period in 2006. The third quarter of 2007 results increased primarily due to extra costs
associated with Valleys continued branch expansion initiative. Other non-interest expense decreased during the nine months ended September 30, 2007 mainly due to an offset of $1.3 million in total net unrealized gains on the junior
subordinated debentures issued to capital trust and one Federal Home Loan Bank advance held at fair value.

Non-interest expense decreased approximately $1.1 million, or 1.6 percent to $64.6 million for the quarter ended September 30, 2007 from $65.6 million for the quarter ended September 30, 2006. Advertising expense declined $1.7
million from the third quarter of 2006 as Valley decreased name branding promotions in the third quarter of 2007. Professional and legal fees also decreased $1.1 million mainly due to fees related to tax planning recognized during the third quarter
of 2006. Offsetting these decreases to non-interest expense, other non-interest expense increased approximately $1.0 million and salary and employee benefits increased $777 thousand mainly due to the addition of eight de novo branches to
Valleys branch network over the last twelve month period.

Third quarter of 2007 compared with second quarter of 2007

Non-interest expense increased $3.7 million, or 6.1 percent to $64.6 million for the third quarter of 2007 from $60.9 million for the linked quarter ended June 30,
2007 mainly due to a $3.5 million increase in other non-interest expense. The increase was primarily due to an unrealized gain of $2.7 million on Valleys junior subordinated debentures in the second quarter of 2007.